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Letter of Intent Purchase Agreement

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LETTER OF INTENT PURCHASE AGREEMENT

This Letter of Intent Purchase Agreement (the "Letter") is entered into as of by and between Buyer Name: with principal address: and Seller Name: with principal address: .

RECITALS

WHEREAS, Seller is the owner of certain real property and related assets described below and desires to sell to Buyer, and Buyer desires to acquire from Seller, subject to the terms and conditions set forth herein; and

WHEREAS, the parties wish to set forth their mutual understanding regarding the principal commercial terms of a proposed purchase and sale transaction so that the parties may proceed with negotiation, due diligence, and preparation of definitive transaction documents; and

WHEREAS, the parties acknowledge that, except as expressly provided herein, this Letter is intended only as a statement of present intent and is not intended to create a binding obligation to consummate the transaction.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. PROPERTY

1.1 Description. Seller proposes to sell, and Buyer proposes to purchase, the property and related assets described as follows:

2. PURCHASE PRICE

2.1 Purchase Price. The proposed purchase price for the Property shall be $ (the "Purchase Price"), payable as provided in this Letter and the definitive purchase agreement.

3. EARNEST MONEY / DEPOSIT

3.1 Deposit. Buyer shall deliver to Escrow Holder an earnest money deposit in the amount of $ (the "Deposit") within days after execution of this Letter. The Deposit shall be held by: .

4. DUE DILIGENCE

4.1 Due Diligence Period. Buyer shall have a period of days from the date the Deposit is delivered to complete inspections, review title, environmental reports, leases, contracts, and other matters reasonably related to the Property (the "Due Diligence Period"). Buyer may terminate the proposed transaction for any reason during the Due Diligence Period by written notice to Seller, in which case the Deposit shall be handled in accordance with the escrow instructions.

5. CLOSING

5.1 Closing Date and Location. The anticipated closing date shall be , subject to satisfaction or waiver of conditions precedent, at the offices of: .

5.2 Closing Deliveries. At Closing, Seller shall deliver a general warranty deed or other agreed instrument of conveyance, an owner’s title insurance commitment consistent with the transaction, and customary bills of sale and assignment documents. Buyer shall deliver the balance of the Purchase Price by wire transfer or other cleared funds.

6. TITLE, SURVEY AND SURVEY COSTS

6.1 Title and Survey. Seller shall cooperate with Buyer in obtaining a commitment for an owner’s policy of title insurance and, if requested by Buyer, a survey. Any title exceptions or survey defects identified shall be subject to negotiation; Seller shall use commercially reasonable efforts to cure title defects that are required to be cured for consummation of the transaction.

7. REPRESENTATIONS AND WARRANTIES

7.1 Seller Representations. For purposes of evaluating the transaction and in any definitive agreement, Seller will represent that (a) Seller has good and marketable title to the Property free and clear of liens except as disclosed to Buyer in writing; (b) there are no material violations of applicable law affecting the Property known to Seller; and (c) Seller has full power and authority to enter into and perform its obligations under the definitive agreements.

7.2 Buyer Representations. Buyer will represent that it has the requisite corporate or other authority to enter into this Letter and to perform its obligations and that Buyer has sufficient funds or financing commitments to consummate the transaction, subject to the terms of any definitive documents.

8. CONDITIONS PRECEDENT

8.1 Conditions. The obligations of Buyer to close the transaction shall be subject to the satisfaction or written waiver of customary conditions precedent, including: (a) Buyer’s completion of satisfactory due diligence, (b) delivery of title and survey consistent with this Letter, (c) receipt of all required consents and approvals, and (d) absence of any material adverse change affecting the Property between the Effective Date and Closing.

9. CONFIDENTIALITY AND NON-CIRCUMVENTION

9.1 Confidentiality. The parties agree that all non-public information provided in connection with the proposed transaction shall be treated as confidential and shall not be disclosed to any third party except to the extent necessary for due diligence, financing, or as required by law. This obligation of confidentiality shall survive termination of this Letter for a period of two (2) years.

10. EXPENSES

10.1 Payment of Expenses. Except as otherwise provided in a definitive agreement, each party shall bear its own costs and expenses incurred in connection with the negotiation, preparation and execution of this Letter and any definitive transaction documents, including legal, accounting and brokerage fees. Any brokerage commissions shall be the responsibility of the party that engaged the broker, subject to written agreements.

11. BINDING EFFECT

11.1 Binding Provisions. Notwithstanding anything to the contrary, the provisions of Sections 3 (Earnest Money / Deposit), 9 (Confidentiality and Non-Circumvention), 10 (Expenses), 13 (Notices), 14 (Governing Law), and this Section 11 shall be binding and enforceable obligations of the parties. Except for those specific provisions, this Letter is non-binding and neither party shall have any obligation to consummate the transaction unless and until executed definitive purchase and sale agreements are executed by the parties.

12. TERMINATION

12.1 Termination. This Letter shall automatically terminate upon the earlier of: (a) mutual written agreement of the parties; (b) expiration of the Due Diligence Period without execution of a definitive agreement; or (c) written notice by either party if the other materially breaches a binding provision of this Letter and fails to cure within ten (10) days after receiving written notice of such breach.

13. NOTICES

13.1 Notices. All notices, demands or other communications required or permitted under this Letter shall be in writing and shall be delivered by hand, overnight courier, registered or certified mail (return receipt requested) or by email transmission followed by a hard copy, to the addresses set forth below or to such other address as either party may designate by written notice.

14. GOVERNING LAW; VENUE

14.1 Governing Law. This Letter shall be governed by and construed in accordance with the laws of the state identified below, without regard to conflicts of law rules. The parties agree that any dispute arising out of the binding provisions of this Letter shall be resolved in the state and federal courts located in the jurisdiction designated below, and each party consents to exclusive jurisdiction and venue therein.

15. ENTIRE AGREEMENT; SEVERABILITY

15.1 Entire Agreement. This Letter, together with any exhibits or schedules expressly incorporated herein, constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior oral or written understandings, proposals and communications.

15.2 Severability. If any provision of this Letter is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired.

16. AMENDMENTS; WAIVER; COUNTERPARTS

16.1 Amendments and Waiver. This Letter may be amended or modified only by a written instrument signed by both parties. No failure or delay by either party in exercising any right, power or privilege shall operate as a waiver thereof.

16.2 Counterparts. This Letter may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Electronic or facsimile signatures shall be binding.

17. MISCELLANEOUS

17.1 Survival. The representations and warranties made in any definitive agreement shall survive the Closing as provided therein. The obligations set forth as binding in Section 11 shall survive termination of this Letter to the extent stated therein.

Buyer (Printed Name):

By:

Date:

Seller (Printed Name):

By:

Date:

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What a Letter of Intent Purchase Agreement Is

A Letter of Intent Purchase Agreement (LOI Purchase Agreement) is a preliminary written statement outlining the principal terms under which a buyer intends to acquire assets, equity, or property from a seller. It records core deal points—purchase price, assets included, payment terms, exclusivity, due diligence periods, closing timeline, and conditions precedent—while reserving final obligations for a definitive purchase agreement. An LOI can allocate binding and nonbinding provisions; parties commonly complete diligence and negotiate the final contract after executing the LOI, often with attorney review to confirm enforceability.

Why a Clear LOI Purchase Agreement Matters

A precise LOI Purchase Agreement reduces misaligned expectations, documents key terms for diligence, and can protect negotiation positions while parties prepare a definitive purchase contract.

Why a Clear LOI Purchase Agreement Matters

Who Typically Prepares and Signs an LOI Purchase Agreement

Typical users who prepare or sign this document include parties to asset, business, or real estate transactions and their advisors.

  • Buyers and investors evaluating an acquisition who need a documented roadmap for price, scope, and due diligence obligations.
  • Seller representatives and owners defining sale parameters, timelines, and any required deposits while preserving negotiation flexibility.
  • Brokers, legal counsel, and advisors preparing conditional terms, advising on enforceability, and coordinating due diligence deliverables.

Use the LOI to set negotiation guardrails and ensure all parties understand timelines, contingencies, and preliminary obligations.

Step-by-Step: How to Complete an LOI Purchase Agreement

Follow these sequential steps to draft and complete a clear, enforceable Letter of Intent Purchase Agreement before negotiating the definitive purchase contract.

  • 01
    Identify Parties: List full legal names, addresses, and authorized contacts for buyer and seller.
  • 02
    State Terms: Specify purchase price, assets included, payment mechanics, and any deposits.
  • 03
    Set Deadlines: Define exclusivity, due diligence, financing, and closing target dates.
  • 04
    Sign & Retain: Obtain signatures from authorized representatives and keep an executed copy for records.

Core Elements to Include in a Professional LOI Purchase Agreement

Include concise, well-defined provisions that allocate risk, establish process, and guide the transition from preliminary terms to a final purchase agreement.

Purchase Price

Clearly state the agreed price, payment schedule, deposit or escrow mechanics, and any allocation between tangible and intangible assets to avoid valuation disputes.

Assets & Exclusions

Identify included assets, excluded items, assigned contracts, and intellectual property with attached schedules or exhibits for precise scope definition.

Due Diligence

Define the scope, access rights, document delivery schedule, and who pays for third-party reports such as title, environmental, or valuation.

Exclusivity

Specify the exclusive negotiation period, start and end events, permitted exceptions, and remedies for breach of exclusivity.

Conditions

List conditions precedent—financing, regulatory approvals, third-party consents—and identify which are for buyer, seller, or mutual satisfaction.

Governing Law

Choose the governing state law and dispute resolution method to reduce uncertainty about interpretation and venue for enforcement.

Essential Data Fields to Include

Document Title: Letter of Intent Purchase Agreement
Parties: Buyer and seller full legal names
Effective Date: MM/DD/YYYY format
Purchase Price: Numeric amount and currency
Signatures: All parties sign and date
Exhibits: Schedules listing included assets

How Online Execution and Routing Typically Work

Typical online workflow for creating, sending, and executing an LOI Purchase Agreement using eSignature and document management tools.

  • Prepare Document: Upload template and populate required fields.
  • Set Signers: Add parties, define signing order and roles.
  • Send for Signature: Distribute via secure link or email with authentication.
  • Archive & Audit: Store signed PDF with audit trail and metadata.

Recommended eSigning Workflow Settings

Configure an eSigning workflow to collect signatures, authenticate signers, and maintain records for the LOI process.

Field Configuration
Signature Authentication Email plus SMS code or knowledge-based authentication for higher assurance.
Conditional Fields Show or hide clauses based on selected transaction options.
Template Library Store reusable LOI templates to enforce consistent language.
CRM Integration Push signed documents to Salesforce or NetSuite automatically.

Platform Capabilities for eSubmission and eSigning

For secure eSubmission, ensure the signing platform supports required integrations, compliance frameworks, and common file formats.

  • Integrations: Salesforce, NetSuite, Microsoft 365, Google Workspace
  • Formats: PDF, DOCX, HTML accepted
  • Security Standards: AES-256 at rest; TLS 1.2/1.3 in transit

Common Timelines and Deadlines for an LOI Purchase Agreement

Typical timing elements you should set in the LOI to drive diligence, exclusivity, contract negotiation, and closing.

Exclusivity Period:

Commonly 30–90 days; define exact start and end dates.

Due Diligence Window:

Often 30–60 days for inspections and document review.

Financing Contingency:

Set lender approval deadline or date to waive financing.

Closing Date Target:

Usually 60–120 days from execution, subject to conditions.

Termination Notice:

Require written notice, commonly 5–10 business days.

Milestones from LOI to Closing

Numbered milestones to guide parties through LOI execution, due diligence, definitive agreement, and closing.

01

LOI Execution

Parties sign initial terms and set the due diligence schedule.

02

Diligence Completion

Buyer completes inspections, reviews documents, and raises any issues.

03

Definitive Agreement

Negotiate and sign the final purchase agreement incorporating agreed terms.

04

Closing & Transfer

Exchange funds, deliver instruments, and transfer assets or title.

Common Mistakes to Avoid When Preparing an LOI Purchase Agreement

  • Vague term descriptions leading to post-signing disputes over what is included, resulting in costly renegotiations or litigation.
  • Failing to specify exclusivity periods or due diligence deadlines, which allows overlapping negotiations with other buyers.
  • Not clearly defining contingencies—financing, title, or regulatory approvals—so expectations diverge and obligations are disputed.
  • Relying on oral amendments or unsigned modifications that lack mutual agreement and fail electronic signature standards.

Potential Risks and Consequences of an Incorrect LOI

Unintended Binding Clauses: May create enforceable obligations
Deposit Forfeiture: Buyer may lose deposit if conditions unmet
Confidentiality Breach: Liability for disclosing sensitive information
Regulatory Failure: Deal collapse without necessary approvals
Tax Consequences: Unexpected reporting or withholding obligations
Missed Deadlines: Loss of rights or termination options

eSignature Pricing and Feature Comparison for LOI Workflows

Pricing and feature availability vary by vendor and plan; the table below compares starting price and common LOI-relevant features across major providers with signNow listed first.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes (Business Premium) Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Frequently Asked Questions About LOI Purchase Agreements

Answers to common questions about enforceability, electronic signatures, amendments, notarization, supporting documents, and record retention for LOIs.


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